Energy Transition Partnership Draft Orientation Paper

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1 Intrductin Energy Transitin Partnership Draft Orientatin Paper The energy system is crucial t the future prsperity and liveability f Eurpean cities. It prvides a smart integrated system that is able t meet a city s energy demand in the mst carbn and cst efficient way. A city s energy demand includes every day chices and activities pursued by its citizens and business as well as the peratin f its supprting infrastructure t allw the city t perate effectively. This system needs t be secure, resilient, affrdable, clean and sustainable. If cities want t have a bright future that vercmes the challenges that they face, then they need t think carefully abut hw they develp their future energy system. Energy transitin is a lng-term structural change in energy systems aimed at develping a secure, affrdable and climate friendly energy system better able t manage and balance dynamic patterns f supply and demand frm a natinal and even Eurpean level right dwn t a lcal level. This must enhance bth natinal and Eurpean energy security while ensuring energy equality: affrdable energy accessible by all citizens. The wrd transitin alludes t the change frm a present state t a future ne. This undertaking cnsists f integrating innvative smart technlgy and cntrl systems in rder t help ptimise the effective use f energy and minimise primary energy demand, thrugh fr example better cntrl f energy use in buildings and the integratin f city infrastructure and energy planning. Cmpsitin f the Partnership Crdinatrs Gdansk (PL) Lndn (UK) Reselare (BE) Partners representing Urban Authrities 1

2 Gthenburg (SE) Navarra Nasuvinsa (ES) Udine (IT) Tilburg (NL) Vaasa (FI) Vidzeme Regin (LV) Warsaw (PL) CEMR EUROCITIES Partners representing Member States France Germany Partners representing the Eurpean Cmmissin DG REGIO Partners representing Stakehlders EIB Observers URBACT Secretariat ECORYS Cntext and Starting Psitin The energy transitin requires a lng-term structural change in ur apprach t energy systems, creating a mre integrated and smarter energy system that is better able t manage and balance dynamic patterns f supply and demand at an EU, natinal and lcal level. The energy system is fundamental t enabling a successful and cst-effective energy transitin in the EU. The future prsperity and liveability f Eurpean cities depend n creating a smarter, mre integrated energy system at an EU, natinal and lcal level; a system that is secure, resilient, affrdable, clean and sustainable. A system-level apprach that will: minimise energy demand; diversify ur energy surces; maximise cst effective cmbinatins f strage ptins; deply smart platfrms, technlgies and cntrls and management t: create a mre integrated, smarter and mre decentralised energy system; ptimise use f secndary energy surces; prvide affrdability and chice t cnsumers; enable custmers t be energy prsumers - bth cnsumers and prducers. Majr challenges f Energy Transitin are: Implement the required Disruptive Apprach; Create a new smart, integrated energy system with greater levels f decentralizatin delivering a secure, resilient, clean, lw carbn and affrdable energy system; Intrductin f the Circular Energy System: Reduce use, Reuse available secndary energy surces and then meet remaining energy demand with Renewable energy; 2

3 Creating an energy market that recgnises and rewards all players in enabling the transitin t a flexible demand-led energy system; Realising the financial benefits that such an energy market wuld deliver at a building, cmmunity, district and city level; Enabling new players with new business mdels t enter the market, such as civic energy which invlves peple and cmmunities r energy C-ps that re-invest prfits back int the cmmunity; Create a cherent and integrated regulatry framewrk that supprts this transitin at the EU, MS and lcal levels; T ensure n-ging cmpetitiveness f EU businesses and that EU businesses are part f the slutin, generating jbs and ecnmic activity; Transitin needs t be aware and supprtive f peple and businesses; Gaining scial/cmmunity invlvement; Renewables are imprtant part f the slutin but need a system that can accmmdate their intermittent nature and effectively integrate them; Ensure sustainable urban develpment plans and appraches, with energy masterplanning playing a key rle; Integratin with ther UA Partnerships and ther activities is essential; Gaining acceptance fr impact n the lcal envirnment and its aesthetics; Cmmn language between energy cmpanies and cities and cnsumers and their invlvement; Ensuring it addresses nt cmpunds energy pverty; Ensuring it delivers energy security and resilience. Majr Energy Transitin bttlenecks: Regulatry framewrk is hlding back the transitin; Incherent existing energy systems n state and city levels; Lack f technical and financial knwledge and capacity t deliver the radical transitin required; Lack f data and access t available data that can infrm and enable apprpriate and fcused prjects and prgrams; Lw prices f and subsidies fr fssil fuel energy; Lw price f carbn in ETS and lack f price f carbn in nn-ets sectrs effectively creates n market driver fr lw and zer carbn surces; Lack f invlvement f cnsumers and cmmunities, as well as DG Energy; Cmplex wnership structure f many types f buildings, bth residential and nn-residential; Lack f capacity fr cst-effective and efficient energy strage slutins, bth at the building and system level. 3

4 Opprtunities Life cycle csts f the challenge cnstructin, management and peratin will help make the business case fr actin; T stimulate and catalyse the transitin thrugh effective regulatin; T create a fair and level-playing fr all slutins s mst cst and carbn cmpetitive slutins cme thrugh; Knwledge sharing and exchanging f best practice; T prvide technical and financial supprt t deliver prjects fr smaller municipalities; Cmpetitiveness f an unsubsidised energy market, a crucial cmpnent f driving innvatin and price cntrl; Cntinuing innvatin and technlgy imprvement; Easier access t the imprved market pprtunities that are created thrugh regulatin and the increasing price f carbn. Cmmercialisatin f slutins and supprt t SMEs; Invlvement f citizens in energy planning, and cnsumptin chices; New financing tls/mdels and develpment f existing nes t specifically supprt cities t deliver the energy transitin in their cities; Cnnectin f Energy Transitin t ther plicy dmains e.g. husing, and recgnitin f the benefits it can deliver; User riented innvatin and technlgies t ensure changes and pprtunities are accessible and realised; Greater access t available data t better plan, manage and execute the transitin. Aims and Objectives: t create a Smart, Integrated Energy System that is: Secure and Resilient An energy system that has a diverse and extensive range f energy surces that it has cntrl ver and strage capacity that it is able t utilise s that it is best able t meet the energy demand f its custmers under as brad a range f circumstances as pssible. This requirement f the system ensures that the design and cnfiguratin f the energy system allws it t mitigate against a diverse range f risks t energy availability ensuring that energy is available t as many f its custmers as cnsistently as is pssible. Affrdable, Fair and Equitable An energy system that makes effective use f energy utilising it as efficiently as pssible s that its energy can be supplied t all its cnsumers with the same level f service and in the mst cst-efficient way. This ensures that energy is supplied at a fair price that peple can affrd and at which business can maintain their cmpetitiveness. Clean and Sustainable An energy system that uses energy effectively by minimising demand, minimising wasted energy and then maximising the use f secndary and renewable energy surces t meet its remaining energy demand befre utilising high-efficiency c-generatin t meet the residual demand. It als minimises harmful gaseus and particulate emissins t the atmsphere t play an imprtant rle in imprving air quality in cities. This will be dne by adpting a systems-level apprach that creates a smart, integrated system f systems frm the fllwing fur system cmpnents all cnsidered and integrated thrugh an extensive energy masterplanning prcess: 4

5 1. Energy Surces, Prductin and Strage: Includes: Renewable and nn-renewable primary energy surces; Envirnmental and waste/recverable secndary energy surces; All the cnversin technlgies that can be used in the prductin, use and re-use f energy (it includes pr-sumers); Diverse range f mediums fr string energy. There is a need t map the energy surces available t cities: clean and/r existing residual waste streams, bimass, waste water, pwer plants, renewable slar, wind, tidal, wave, bigas, gethermal, as well as secndary energy air/water/ grund surce waste heat surces; Need a balance between large and smaller cmpanies; Shrt term and lng-term/seasnal strage, as well as size and capacity f strage; Interplay between heat, electricity and hydrgen; Financial recgnitin f rle f strage in system balancing; Impact n Partnerships: Air quality; Circular ecnmy; Husing. Pssible results Incentivise utilisatin f secndary energy surces and strage t drive dwn demand fr primary energy and GHG emissins; Create mechanism that actively encurages secndary heat t be made readily available t heat netwrks by thse that are prducing r husing it Drive develpment f renewable energy capacity; Supprt develpment f extensive strage systems: thermal, electrical and hydrgen; Prvide grid balancing, flexibility and effective integratin f RES; Market signal mechanisms that reward the value that demand side respnse prvides t the netwrk. 2. Energy Distributin Netwrks Needed fr supplying energy heat and pwer t cnsumers; It is particularly imprtant hw they intercnnect and supprt each ther; This is abut hw effectively energy is able t be utilised by capturing and distributing it frm where it is surced t where it is t be used this is relevant at an EU, natinal and city level and als cnsiders hw these systems can be inter-cnnected; Integratin f pwer, heat, gas, cling and ther netwrks is crucial fr efficient peratin; Cnstructin f new and adaptin f existing distributin netwrks, especially in cities, where sub-surface utilities are already very cngested; ld cities are very difficult t lay new distributin infrastructure in but it is necessary s needs c-rdinating; Need fr c-rdinated prgrammes f delivery acrss utilities, including all types f infrastructure at building, site, estate, neighburhd and district level; Hierarchy fr cnnectin f existing and new energy surces, priritising secndary and then renewable surces, zer cnnectins; Challenges f size and speed f urban develpment, minimising sprawl, and crdinating energy supply slutins. Impact n Partnerships: Land use; Husing; Circular Ecnmy. 5

6 Pssible results: Integratin f pwer, heat and gas netwrks; Tw-way relatinship between natinal and city level systems with each supprting and enabling flexibility f the ther; T create a market structure that encurages carbn efficient slutins fr grid flexibility and the transitin t a demand-led energy system. 3. Smart Data Platfrms, Cntrls and Energy Management Smart platfrms and technlgies enabling system flexibility by utilising data t ptimise type and nature f energy cnsumptin alng with supply at a building and/r system level in rder t balance the system; The amunt and timing f energy prductin and cnsumptin is essential fr system balancing and this prvides the pprtunity fr a range f demand management and respnse activities t transitin t a demand led energy system; Lng term energy planning fr peratin and evlutin f the system; Interplay between energy prviders and energy cnsumers, using the netwrk as the intercnnectr and within this hw d we encurage cnsumers t be prsumers; Planning fr energy psitive districts; Energy management systems and decarbnised netwrks very imprtant in addressing emissins frm histrical building stck where fabric imprvements are nt pssible; Energy tariffs, such as time-f-use, need t be created t influence and direct the market t reward demand-side management; Smart meters, trading systems and aggregatrs enabling cnsumers t actively participate in demand-side management; Data-base t prvide intelligence fr infrming decarbnisatin activity: energy data needs t be made available t cities frm bth an energy efficiency and supply perspective; Rles and pprtunities f virtual pwer plants; Stand-by capacity cst and respnsibility and prcess t priritise clean lw carbn slutins; Psitin f privacy in the data platfrms and hw it can be secured n the platfrms. Impact n Partnership: Digital Transitin; Public Prcurement. Pssible results: Utilisatin f data, smart technlgies and cntrls and energy management systems t ptimise perfrmance at a system and building level Develpment f psitive market mechanisms t encurage prducers and cnsumers t partake in active demand respnse activities. 4. Energy Cnsumptin When, hw and hw much energy cnsumers and their buildings and appliances use plays an imprtant rle in the ptimisatin f the energy system and they clearly need t be an integral part f it; Cnsumers include residential, cmmercial, industrial and transprt and can include pr-sumers as well as district heat netwrks and ther varius strage ptins as a way f cnsuming surplus energy and making available at a later date; It is essential t minimise actual energy demand in a cst effective way s that as much f remaining energy demand as pssible can be met by secndary and renewable energy surces; 6

7 Imprve building regulatins specificatins and quality requirements fr place and building design requirements t help address verheating issues; Educate cnsumers t use their buildings in the ptimum way (as they were designed t be used); Energy platfrms t supprt peple t undertake energy efficiency wrk n buildings e.g. technical supprt financial supprt tax relief r credits fr ding EE; Rle f cities in educatin f citizens and explaining and raising awareness f the benefits f energy efficiency and lw carbn energy supply and recgnising the rle f higher level administratin fr supprting this prcess; Gamificatin t supprt awareness raising, fr energy efficiency and lw carbn energy generatin, this culd include water and waste; Educate cnsumers abut the pprtunity t be prsumers and financial benefits f this; Address transprt systems alng with industrial and cmmercial cnsumptin Integrated urban spatial planning, including energy masterplanning, ensuring it anticipates lcatin and quantum f increasing energy demand assciated with ppulatin grwth. Impact n Partnerships: Husing; Digital Transitin; Urban Pverty. Pssible results: Market mechanisms t accelerate rll-ut f extensive energy efficiency activity as a fundamental rle in reducing demand fr primary energy and GHGs; Citizens understand the need fr and nature f the energy transitin; Citizens understand and actively engage in energy efficiency and lw carbn energy generatin activities. The Levers fr affecting change and enabling the Energy Transitin (ET) thrugh this Partnership: Regulatin We will explain the cntext f this and its rle in the ET; Financing We will explain the cntext f this and its rle in the ET; Knwledge Transfer We will explain the cntext f this and its rle in the ET. The Relevance f the Three Levers t the fur System Cmpnents identified 1. Energy Surces, Prductin and Strage Cntext and cntributin t the Energy Transitin a. Regulatin Cntext and rle in catalysing ET in cities b. Financing Cntext and rle in catalysing ET in cities c. Knwledge Transfer Cntext and rle in catalysing ET in cities 2. Energy Distributin Netwrks - Cntext and cntributin t the Energy Transitin a. Regulatin Cntext and rle in catalysing ET in cities b. Financing Cntext and rle in catalysing ET in cities c. Knwledge Transfer Cntext and rle in catalysing ET in cities 3. Smart Data Platfrms, Cntrls and Energy Management - Cntext and cntributin t the Energy Transitin a. Regulatin Cntext and rle in catalysing ET in cities b. Financing Cntext and rle in catalysing ET in cities c. Knwledge Transfer Cntext and rle in catalysing ET in cities 4. Energy Cnsumptin - Cntext and cntributin t the Energy Transitin 7

8 a. Regulatin Cntext and rle in catalysing ET in cities b. Financing Cntext and rle in catalysing ET in cities c. Knwledge Transfer Cntext and rle in catalysing ET in cities Hw d each f these identified areas interact with the fur system cmpnents? Hw can they help deliver each f them and hw can they add value t them? Areas Surces, Prductin and Strage Distributin Netwrks Smart Data Platfrms, Cntrls and Management Cnsumptin Technlgies and smart transitin Integrated neighburhd energy sufficiency Plicy develpment Integrated planning and develpment Envirnmental and clean transitin Ecnmy and affrdable transitin Scial and cultural transitin Energy Transitin essentials Efficient and feasible lcal regulatins in additin t the EU Directives and natinal regulatins; Renewables are essential part f the slutin but need t be well integrated thrugh the use f district heat netwrks and varius strage ptins; Sustainable urban develpment requires integrated plans and appraches, including Energy MasterPlanning; Link t different tpics and ther UA Partnerships is essential; Civic energy invlving peple and cmmunity, scial respnsibility and gaining cmmunity invlvement; Respnsible transitin is supprtive f peple and businesses and enables businesses t benefit frm the market pprtunities that it creates; Cmmn language between energy cmpanies, EU, MS, cities and cnsumers; Life cycle csts f the challenge need t be understd cnstructin, management and peratin f the system (Capex and Opex). 8

9 Energy Transitin Spatial Dimensins and actrs Eurpe / businesses / EU; State / Member State gvernments; Regins / Reginal gvernments; City / Municipalities; Neighburhd / Lcal initiatives; Building / Building administratins; Dwelling / Citizens. Energy as binder and enabler f ther partnerships, especially: Husing; Digital Transitin; Air Quality; Climate Adaptatin; Urban Mbility; Urban Pverty; Circular Ecnmy; Sustainable Land Use. Fcal pints: Mapping energy transitin needs, bttlenecks and slutins including thse identified by ther UA Partnerships ; Mapping f existing Energy Transitin legal, financial and technlgical slutins EU wide, bth n Eurpean, natinal, city, neighburhd and micr scale as a starting pint fr further investigatins; Cncentratin f urban related energy issues, especially husing, mbility, infrastructure, security, market and planning; Identificatin f available energy transitin funds, technlgies and practices, identify existing and ptential bttlenecks and ptential slutins; Suggesting slutins t enhance the Eurpe wide Energy Transitin, especially frm a regulatry and financing perspective. 9